HR 4248 IH
101st CONGRESS
2d Session
 H. R. 4248
To assist first-time homebuyers to purchase homes through first home
ownership accounts, elimination of the capital gains tax on the sale of a
principal residence, extension of mortgage bonds, modified FHA authority,
and downpayment and shared equity plans.
IN THE HOUSE OF REPRESENTATIVES
Mr. DOUGLAS (for himself, Mr. BARTLETT, Mr. WEBER, Mr. GALLO, Mr. MCEWEN,
Mr. SMITH of New Jersey, Mrs. VUCANOVICH, Mr. BLILEY, Mr. GUNDERSON, Mr. JAMES,
Mr. DONALD E. LUKENS, Mr. PAXON, Mr. DUNCAN, and Mr. COX) introduced the
following bill; which was referred jointly to the Committees on Ways and
Means and Banking, Finance and Urban Affairs
A BILL
To assist first-time homebuyers to purchase homes through first home
ownership accounts, elimination of the capital gains tax on the sale of a
principal residence, extension of mortgage bonds, modified FHA authority,
and downpayment and shared equity plans.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SECTION 1. SHORT TITLE.
  This Act may be cited as the `Affordable Housing and First Home Buyer
  Assistance Act of 1990'.
SEC. 2. CONGRESSIONAL FINDINGS.
  The Congress finds that--
  (1) the decennial census has shown that the rate of homeownership,
  especially among young families, has declined significantly since 1980;
  (2) young families with moderate incomes increasingly find themselves
  unable to purchase homes because they are unable to pay the downpayment
  required for a mortgage;
  (3) in 1984, first-time homebuyers saved for an average of 1.8 years for
  a downpayment;
  (4) in 1989, first-time homebuyers save for an average of 2.4 years for a
  downpayment and among first-time homebuyers in the northeast the average
  is 3.7 years;
  (5) the percentage of young (under 25 years of age) 2-parent families
  owning homes dropped from 38.9 percent to 29.1 percent between 1973 and 1987;
  (6) the percentage of young single parents owning homes dropped more than
  50 percent between 1973 and 1987;
  (7) for the entire United States, the median price of a new home for the
  first quarter of 1989 was 8.2 percent higher than for the 1st quarter of
  1988, and in certain areas of the United States the increase in the median
  home price for the period was as much as 24.9 percent;
  (8) since 1980, the rate of homeownership in America has declined after
  rising steadily for 35 years and the greatest decline has been among young
  Americans 25 to 34 years old;
  (9) homeownership has long been considered the bedrock of American society
  and is credited with building stable neighborhoods, providing a better
  environment to raise children, as well as being the primary means for most
  people to accumulate wealth and have a stake in the American dream;
  (10) the declining rate of homeownership among young adults could portend
  serious socioeconomic problems for the United States in the years ahead; and
  (11) a homeownership program should avoid drawing on limited Federal
  revenues, but rather should utilize the existing proven Federal housing
  credit infrastructure, thereby maximizing efficiencies and preserving
  Federal funds for the needs of low-income renters and the homeless.
TITLE I--FIRST HOME OWNERSHIP ACCOUNTS
SEC. 101. FIRST HOME OWNERSHIP ACCOUNTS.
  (a) IN GENERAL- Part VII of subchapter B of chapter 1 of the Internal Revenue
  Code of 1986 (relating to additional itemized deductions for individuals)
  is amended by redesignating section 221 as section 222 and by inserting
  after section 220 the following new section:
`SEC. 221. FIRST HOME OWNERSHIP ACCOUNTS.
  `(a) DEDUCTION ALLOWED- In the case of an individual who had no present
  ownership interest in a residence at any time during the taxable year
  or any prior taxable year, there is allowed as a deduction the amounts
  paid in cash during the taxable year by such individual to a first home
  ownership account established for the benefit of such individual.
  `(b) Limitations-
  `(1) MAXIMUM DEDUCTION PER ACCOUNT- The amount allowable as a deduction
  under subsection (a) to any individual for amounts paid to an account for
  the benefit of such individual--
  `(A) for any taxable year shall not exceed the lesser of--
  `(i) $2,000, or
  `(ii) an amount equal to the compensation (as defined in section 219(f)(1))
  includible in the individual's gross income for such taxable year, and
  `(B) for all taxable years shall not exceed $20,000.
  `(2) INDIVIDUAL MAY NOT BE BENEFICIARY OF MORE THAN 1 ACCOUNT- If an
  individual is the beneficiary of more than 1 first home ownership account
  during any taxable year, no deduction shall be allowed under subsection
  (a) for any amount paid for such taxable year to any first home ownership
  account established for the benefit of such individual.
  `(c) DEFINITIONS AND SPECIAL RULES- For purposes of this section--
  `(1) FIRST HOME OWNERSHIP ACCOUNT- For purposes of this section, the term
  `first home ownership account' means a trust created or organized in the
  United States for the exclusive benefit of an individual who has never
  had a present ownership interest in a residence, but only if the written
  governing instrument creating the trust meets the following requirements:
  `(A) No contribution will be accepted unless it is in cash, and contributions
  will not be accepted for the taxable year in excess of $2,000. Total
  contributions in all taxable years shall not exceed $20,000.
  `(B) The trustee is a bank (as defined in section 408(n)) or another person
  who demonstrates to the satisfaction of the Secretary that the manner in
  which that person will administer the trust will be consistent with the
  requirements of this section.
  `(C) No part of the trust assets will be invested in life insurance
  contracts.
  `(D) The assets of the trust will not be commingled with other property
  except in a common trust fund or common investment fund.
  `(2) TIME WHEN CONTRIBUTIONS DEEMED MADE- For purposes of this section,
  a taxpayer shall be deemed to have made a contribution on the last day
  of a taxable year if the contribution is made on account of such taxable
  year and is made not later than the time prescribed by law for filing the
  return for such taxable year (not including extensions thereof).
  `(d) TAX TREATMENT OF DISTRIBUTIONS-
  `(1) IN GENERAL- Except as otherwise provided in this subsection, any
  amount paid or distributed out of a first home ownership account shall be
  included in gross income by the payee or distributee, unless such amount is
  used exclusively in connection with the purchase of a principal residence
  for the individual for whom the account was established.
  `(2) EXCESS CONTRIBUTIONS RETURNED BEFORE DUE DATE OF RETURN- Paragraph
  (1) shall not apply to the distribution of any contribution paid during
  a taxable year to a first home ownership account to the extent that such
  contribution exceeds the amount allowable as a deduction under subsection
  (a) if--
  `(A) such distribution is received on or before the day prescribed by law
  (including extensions of time) for filing such individual's return for
  such taxable year,
  `(B) no deduction is allowed under subsection (a) with respect to such
  excess contribution, and
  `(C) such distribution is accompanied by the amount of net income
  attributable to such excess contribution.
Any net income described in subparagraph (C) shall be included in the gross
income of the individual for the taxable year in which it is received.
  `(3) TRANSFER OF ACCOUNT INCIDENT TO DIVORCE- The transfer of an individual's
  interest in a first home ownership account to his former spouse under a
  divorce decree or under a written instrument incident to a divorce shall
  not be considered a taxable transfer made by such individual notwithstanding
  any other provision of this subtitle, and such interest at the time of the
  transfer shall be treated as a first home ownership account of such spouse
  and not of such individual. Thereafter such account shall be treated,
  for purposes of this subtitle, as maintained for the benefit of such spouse.
  `(e) TAX TREATMENT OF ACCOUNTS-
  `(1) EXEMPTION FROM TAX- A first home ownership account shall be exempt from
  taxation under this subtitle unless such account has ceased to be a first
  home ownership account by reason of paragraph (2) or (4). Notwithstanding
  the preceding sentence, any such account shall be subject to the taxes
  imposed by section 511 (relating to imposition of tax on unrelated business
  income of charitable, etc. organizations).
  `(2) LOSS OF EXEMPTION OF ACCOUNT WHERE INDIVIDUAL ENGAGES IN PROHIBITED
  TRANSACTION-
  `(A) IN GENERAL- If, during any taxable year of the individual for whose
  benefit the first home ownership account is established, that individual
  engages in any transaction prohibited by section 4975 with respect to the
  account, the account shall cease to be a first home ownership account as
  of the first day of that taxable year.
  `(B) ACCOUNT TREATED AS DISTRIBUTING ALL ITS ASSETS- In any case in
  which any account ceases to be a first home ownership account by reason
  of subparagraph (A) on the first day of any taxable year, paragraph (1)
  of subsection (d) shall be applied as if there were a distribution on such
  first day in an amount equal to the fair market value (on such first day)
  of all assets in the account (on such first day).
  `(3) EFFECT OF PLEDGING ACCOUNT AS SECURITY- If, during any taxable year,
  an individual for whose benefit a first home ownership account is established
  uses the account or any portion thereof as security for a loan, the portion
  so used shall be treated as distributed to that individual.
  `(4) EFFECT OF ACQUISITION OF PRINCIPAL RESIDENCE-
  `(A) IN GENERAL- In the event that the individual for whose benefit a
  first home ownership account has been established acquires a residence in
  any taxable year, such account shall cease to be a first home ownership
  account and shall thereafter be treated for purposes of this title as an
  individual retirement account.
  `(B) SPECIAL RULES UPON MARRIAGE- Any individual for whose benefit a first
  home ownership account has been established and who marries an individual
  who owns a principal residence shall, for purposes of this paragraph,
  be deemed to have acquired a principal residence on the date of marriage,
  and such account shall thereafter be treated for purposes of this title
  as an individual retirement account.
  `(5) ACCOUNT TREATED AS INDIVIDUAL RETIREMENT ACCOUNT AFTER AGE 59 1/2 -
  For purposes of this title, after the date the individual for whose benefit
  the first home ownership account is established attains age 59 1/2 , such
  account shall be treated as an individual retirement account and subsection
  (f)(1) shall not apply.
  `(6) INVESTMENT IN COLLECTIBLES TREATED AS DISTRIBUTIONS- Rules similar
  to the rules of section 408(m) shall apply to first home ownership accounts.
  `(f) Additional Tax on Certain Amounts Included in Gross Income-
  `(1) DISTRIBUTION NOT USED FOR PURCHASE OF RESIDENCE- If a distribution
  from a first home ownership account is made, and not used in connection with
  the purchase of a principal residence for the individual for whose benefit
  the account was established, the tax liability of such individual for the
  taxable year in which such distribution is received shall be increased by
  an amount equal to 10 percent of the amount of the distribution which is
  includible in his gross income for such taxable year.
  `(2) DISQUALIFICATION CASES- If an amount is includible in the gross income
  of an individual for a taxable year under subsection (d), his tax under
  this chapter for such taxable year shall be increased by an amount equal
  to 10 percent of such amount required to be included in his gross income.
  `(3) DISABILITY OR DEATH CASES- Paragraphs (1) and (2) shall not apply if
  the payment or distribution is made after the individual for whose benefit
  the first home ownership account becomes disabled within the meaning of
  section 72(m)(7) or dies.
  `(g) COMMUNITY PROPERTY LAWS- This section shall be applied without regard
  to any community property laws.
  `(h) CUSTODIAL ACCOUNTS- For purposes of this section, a custodial account
  shall be treated as a trust if the assets of such account are held by a bank
  (as defined in section 408(n)) or another person who demonstrates, to the
  satisfaction of the Secretary, that the manner in which he will administer
  the account will be consistent with the requirements of this section, and
  if the custodial account would, except for the fact that it is not a trust,
  constitute a first home ownership account described in subsection (c). For
  purposes of this title, in the case of a custodial account treated as a
  trust by reason of the preceding sentence, the custodian of such account
  shall be treated as the trustee thereof.
  `(i) REPORTS- The trustee of a first home ownership account shall make
  such reports regarding such account to the Secretary and to the individual
  for whose benefit the account is maintained with respect to contributions,
  distributions, and such other matters as the Secretary may require under
  regulations. The reports required by this subsection shall be filed at
  such time and in such manner and furnished to such individuals at such
  time and in such manner as may be required by those regulations.'
  (b) DEDUCTION ALLOWED IN ARRIVING AT ADJUSTED GROSS INCOME- Paragraph (7)
  of section 62(a) of such Code (relating to retirement savings) is amended--
  (1) by inserting `OR FIRST HOME OWNERSHIP' after `RETIREMENT' in the
  heading of such paragraph, and
  (2) by inserting before the period at the end thereof the following: `and
  the deduction allowed by section 221 (relating to deduction of certain
  payments to first home ownership accounts).'
  (c) TAX ON EXCESS CONTRIBUTIONS- Section 4973 of such Code (relating to tax
  on excess contributions to individual retirement accounts, certain section
  403(b) contracts, and certain individual retirement annuities) is amended--
  (1) by inserting `FIRST HOME OWNERSHIP ACCOUNTS,' after `ACCOUNTS,' in
  the heading of such section,
  (2) by redesignating paragraph (2) of subsection (a) as paragraph (3)
  and by inserting after paragraph (1) the following:
  `(2) a first home ownership account (within the meaning of section 221(c)),
  or',
  (3) by striking out `or' at the end of paragraph (1) of subsection (a), and
  (4) by adding at the end thereof the following new subsection:
  `(d) EXCESS CONTRIBUTIONS TO FIRST HOME OWNERSHIP ACCOUNTS- For purposes
  of this section, in the case of a first home ownership account, the term
  `excess contributions' means the amount by which the amount contributed
  for the taxable year to the account exceeds the amount allowable as a
  deduction under section 221 for such taxable year. For purposes of this
  subsection, any contribution which is distributed out of the first home
  ownership account in a distribution to which section 221(d)(2) applies
  shall be treated as an amount not contributed.'
  (d) TAX ON PROHIBITED TRANSACTIONS- Section 4975 of such Code (relating
  to prohibited transactions) is amended--
  (1) by adding at the end of subsection (c) the following new paragraph:
  `(4) SPECIAL RULE FOR FIRST HOME OWNERSHIP ACCOUNTS- An individual for whose
  benefit a first home ownership account is established shall be exempt from
  the tax imposed by this section with respect to any transaction concerning
  such account (which would otherwise be taxable under this section) if,
  with respect to such transaction, the account ceases to be a first home
  ownership account by reason of the application of section 221(e)(2)(A)
  to such account.', and
  (2) by inserting `or a first home ownership account described in section
  221(c)' in subsection (e)(1) after `described in section 408(a)'.
  (e) FAILURE TO PROVIDE REPORTS ON FIRST HOME OWNERSHIP ACCOUNTS- Section
  6693 of such Code (relating to failure to provide reports on individual
  retirement account or annuities) is amended--
  (1) by inserting `OR ON FIRST HOME OWNERSHIP ACCOUNTS' after `ANNUITIES'
  in the heading of such section, and
  (2) by adding at the end of subsection (a) the following: `The person
  required by section 221(i) to file a report regarding a first home ownership
  account at the time and in the manner required by such section shall pay
  a penalty of $50 for each failure unless it is shown that such failure is
  due to reasonable cause.'
  (f) CLERICAL AMENDMENTS-
  (1) The table of sections for part VII of subchapter B of chapter 1 of
  such Code is amended by striking out the item relating to section 221 and
  inserting in lieu thereof the following:
`Sec. 221. First home ownership accounts.
`Sec. 222. Cross reference.'
  (2) The table of sections for chapter 43 of such Code is amended by
  striking out the item relating to section 4973 and inserting in lieu
  thereof the following:
`Sec. 4973. Tax on excess contributions to individual retirement accounts,
first home ownership accounts, certain 403(b) contracts, and certain individual
retirement annuities.'
  (3) The table of sections for subchapter B of chapter 68 of such Code is
  amended by striking out the item relating to section 6693 and inserting
  in lieu thereof the following:
`Sec. 6693. Failure to provide reports on individual retirement accounts or
annuities or on first home ownership accounts.'
  (g) EFFECTIVE DATE- The amendments made by this section shall apply to
  taxable years beginning after December 31, 1989.
TITLE II--REPEAL OF TAXATION OF GAIN ON SALE OF PRINCIPAL RESIDENCE
SEC. 201. REPEAL OF TAXATION OF GAIN ON SALE OF PRINCIPAL RESIDENCE.
  (a) REPEAL OF AGE REQUIREMENT- Subsection (a) of section 121 of the
  Internal Revenue Code of 1986 (relating to general rule) is amended to
  read as follows:
  `(a) GENERAL RULE- Gross income does not include gain from the sale or
  exchange of property if, during the 5-year period ending on the date of
  the sale or exchange, such property has been owned and used by the taxpayer
  as his principal residence for periods aggregating 3 years or more.'
  (b) REPEAL OF DOLLAR LIMITATION AND LIMITATION TO 1 SALE OR EXCHANGE-
  Section 121 of such Code is amended by striking subsections (b) and (c)
  and by redesignating subsection (d) as subsection (b).
  (c) TECHNICAL AMENDMENTS-
  (1) Paragraph (1) of section 121(b) of such Code, as redesignated by
  subsection (b), is amended by striking `age, holding, and use' and inserting
  `holding and use'.
  (2) Paragraphs (2) and (3) of section 121(b) of such Code, as so
  redesignated, are amended by striking `subsection (a)(2)' each place it
  appears and inserting `subsection (a)'.
  (3) The section heading of section 121 of such Code is amended by striking
  `ONE-TIME' and by striking `WHO HAS ATTAINED AGE 55'.
  (4) The table of sections for part III of subchapter B of chapter 1 of such
  Code is amended in the item relating to section 121 by striking `one-time'
  and by striking `who has attained age 55'.
  (5) Sections 1033(h)(3), 1034(l), 1038(e)(1)(A), 1250(d)(7)(B), and 6012(c)
  of such Code are each amended by striking `one-time' and by striking
  `who has attained age 55'.
  (d) EFFECTIVE DATE- The amendments made by this section shall apply to
  sales and exchanges after the date of the enactment of this Act, in taxable
  years ending after such date.
TITLE III--MORTGAGE BONDS AND CREDIT CERTIFICATES
SEC. 301. EXTENSION OF PERIOD FOR ISSUANCE.
  (a) MORTGAGE BONDS- Subparagraph (B) of section 143(a)(1) of the Internal
  Revenue Code of 1986 (relating to termination) is amended by striking
  `1990' each place it appears and inserting `1993'.
  (b) MORTGAGE CREDIT CERTIFICATES- Subsection (h) of section 25 of such Code
  (relating to termination) is amended by striking `1990' and inserting `1993'.
TITLE IV--MORTGAGE INSURANCE
SEC. 401. ADJUSTABLE RATE MORTGAGES.
  Section 251 of the National Housing Act (12 U.S.C. 1715z-16) is amended--
  (1) in subsection (a)(2), by striking `1 percent' and inserting `2
  percent'; and
  (2) in subsection (a)(3), by striking `5 percentage points' and inserting
  `6 percentage points'; and
  (3) by striking subsection (c).
SEC. 402. DEFINITION OF FIRST-TIME HOMEBUYERS.
  Section 2(a) of the National Housing Act (12 U.S.C. 1703(a)) is amended
  in the last undesignated paragraph--
  (1) by striking `and' at the end of clause (2),
  (2) by striking the period at the end of clause (3) and inserting `;
  and', and
  (3) by adding at the end the following new clause:
  `(4) the term `first-time homebuyer' means an individual who has not had
  (or an individual and his or her spouse, neither of whom has had) any
  present ownership in a principal residence.'.
SEC. 403. DOWNPAYMENT MORTGAGE DEMONSTRATION.
  (a) DOWNPAYMENTS- Section 2(a) of the National Housing Act (12
  U.S.C. 1703(a)) is amended by inserting after the first paragraph the
  following new paragraph:
  `In addition, the Secretary is authorized, upon such terms and conditions
  as the Secretary may prescribe, to insure, on a demonstration basis, loans
  made for the purpose of financing the downpayment for a principal residence
  (including a manufactured home) of a first-time homebuyer where--
  `(1)(A) the purchase is financed or assisted by tax-exempt financing or
  another government program for first-time homebuyers; and
  `(B) the mortgagor receives financial counseling, as defined by the
  Secretary.
The Secretary may not insure any loan under the demonstration under this
paragraph after the expiration of the 3-year period beginning on the date of
the enactment of the Affordable Housing and First Home Buyer Assistance Act
of 1990, except pursuant to a commitment entered into on or before such date.'.
  (b) LIMITATION ON AMOUNT OF DOWNPAYMENT LOANS- Section 2(b)(1) of the
  National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
  (1) by striking `and' at the end of subparagraph (F),
  (2) by striking the period at the end of subparagraph (G), and inserting
  `; and', and
  (3) by adding at the end the following new subparagraph:
  `(H) $10,000 if made for the purpose of financing the downpayment for a
  principal residence of a first-time homebuyer.'.
  (c) TERM TO MATURITY- Section 2(b)(3) of the National Housing Act (12
  U.S.C. 1703(b)(3)) is amended--
  (1) by striking `and' at the end of subparagraph (G),
  (2) by striking the period at the end of subparagraph (H) and inserting
  `; and', and
  (3) by adding at the end the following new subparagraph:
  `(I) ten years and thirty-two days if made for the purpose of financing
  the downpayment for a principal residence of a first-time homebuyer.'.
SEC. 404. SECONDARY MARKET FOR DOWNPAYMENT MORTGAGE LOANS.
  (a) IN GENERAL- Section 302(b)(1) of the Federal National Mortgage
  Association Charter Act (12 U.S.C. 1717(b)(1)) is amended by inserting
  before the penultimate sentence the following new sentence: `In addition,
  the Association may purchase a loan insured under section 2 of the National
  Housing Act with respect to a downpayment for a first-time homebuyer if
  the principal obligation thereof does not exceed the limitations applicable
  under section 2(b)(1)(H) of such Act.'.
  (b) CONFORMING AMENDMENT- Section 302(b)(1) of the Federal National Mortgage
  Association Charter Act (12 U.S.C. 1717(b)(1)) is amended in the penultimate
  sentence by striking `preceding sentence' and inserting `first sentence'.
SEC. 405. ACCUMULATING DOWNPAYMENT MORTGAGE DEMONSTRATION.
  Section 203 of the National Housing Act (12 U.S.C. 1709) is amended by
  adding at the end the following new subsection:
  `(t)(1) The Secretary may insure under this subsection, on a demonstration
  basis, a mortgage which meets the requirements of subsection (b), except
  that--
  `(A) the mortgage obligation may be 95 percent of the sum of appraised
  value (or purchase price, if less) of the property, and the mortgagor's
  closing costs (as defined by the Secretary);
  `(B) the difference between the amount of the mortgage determined under
  subparagraph (A) and the amount which would be determined under subsection
  (b) shall be fully amortized and repaid (with interest) during the 3-year
  period following execution of the mortgage, and such repayment shall be
  in addition to the payment required under section 203(b)(3); and
  `(C) the mortgagor shall be a first-time homebuyer within the meaning of
  section 2(a)(4) and shall receive financial counseling.
  `(2) The Secretary may not insure any mortgage under the demonstration
  under this subsection after the expiration of the 3-year period beginning
  on the date of the enactment of the Affordable Housing and First Home Buyer
  Assistance Act of 1990, except pursuant to a commitment entered into on
  or before such date.'.
SEC. 406. REPORT AND EVALUATION BY SECRETARY.
  Not later than 1 year after the date of enactment of this Act and annually
  thereafter, the Secretary of Housing and Urban Development shall submit
  to the Congress an evaluation of the programs authorized by the amendments
  made by this title. Such evaluation shall include--
  (1) a profile of the first-time homebuyers for whom financing has been
  provided under the amendments made by this title, including the income
  level of such homebuyers, the price of homes, and the regional distribution;
  (2) a description of the programs, including any special problems
  encountered;
  (3) an analysis of the effects of the demonstration programs established
  by the amendments made by section 403 and 405 on--
  (A) the mortgage insurance funds administered by the Secretary; and
  (B) the existing and prospective financial soundness of the mortgage
  insurance funds; and
  (4) any recommendations the Secretary may deem appropriate regarding
  continuation or modification of the programs authorized by the amendments
  made by this title.
SEC. 407. SUFFICIENT RESERVES TO SUPPORT SINGLE-FAMILY MORTGAGE INSURANCE.
  Section 205 of the National Housing Act (12 U.S.C. 1711) is amended by
  adding at the end the following new subsection:
  `(e) The Secretary shall, for the Mutual Mortgage Insurance Fund, maintain
  a ratio of assets to the outstanding aggregate contingent liability on
  mortgages insured under the Fund of not less than--
  `(1) 1 percent for fiscal year 1991;
  `(2) 2 percent for fiscal year 1992;
  `(3) 3 percent for fiscal year 1993; and
  `(4) 4 percent for fiscal year 1994 and thereafter.'.
TITLE V--STUDY REGARDING SHARED EQUITY MORTGAGES
SEC. 501. SHARED EQUITY MORTGAGE STUDY AND REPORT.
  (a) STUDY- The Secretary of Housing and Urban Development shall conduct
  a study regarding the feasibility and desirability of making or insuring
  shared equity mortgages for first-time homebuyers. For purposes of this
  section, a shared equity mortgage means a mortgage (commonly known as
  a price-level adjusted mortgage or PLAM) in which the downpayment is
  financed by downpayment lenders retaining a partial ownership interest in
  the residence with the homebuyer.
  (b) REPORT- The Secretary shall, upon the completion of the study under
  subsection (a), submit a report to the Congress regarding the results of
  the study, together with any recommendations for legislation establishing
  programs for shared equity mortgages or PLAM's.
  (c) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated
  to carry out the study under subsection (a) $500,000 for fiscal year 1991.